Asian convenience store owners have raised concerns about Tesco’s swoop for the Mills newsagents chain through its West Midland-based subsidiary.

The supermarket’s One Stop Stores, based in Brownhills, has agreed to buy 77 convenience stores from the Mills chain, bringing its number of outlets up to 598 across England and Wales.

The Mills name is well-known throughout the Midlands, with 12 stores in Birmingham including one on Colmore Row in the city centre.

And its buyer One Stop’s history in the region goes back to 1975, when it started life as a cigarette kiosk at Wolverhampton market founded by Kevin Threlfall and his business partner David Lockett-Smith.

The firm has been owned by Tesco since 2003 when the supermarket giant snapped up the Black Country firm T&S Stores in a £530 million deal.

But Tesco’s latest move has attracted criticism from the Institute of Asian Businesses, a body based at Birmingham Chamber of Commerce and Industry.

Arun Bajaj, the institute’s president, said: “This is just another step in the slow attack by the supermarket giants against the smaller independent retailers.

“It’s detrimental to their business. Asian store owners used to trade on the fact that they were open late hours, whereas the supermarkets are now competing on that basis.

“And obviously they are competing on price as well as they are buying in such large quantities. But on the other hand, certain parts of the Asian community are benefiting, including property owners as they are offering their properties for development.”

His concerns were echoed by national trade body the Association of Convenience Stores (ACS), which represents 33,500 members around the country.

ACS chief executive James Lowman called on authorities to look at the growing power of what he described as “Tesco’s shadow brand”.

“The competition authorities have repeatedly failed to grasp the implications of the continuing growth of Tesco’s shadow brand.

The OFT allowed the original acquisition by Tesco of over a thousand stores without adequate scrutiny in 2002 and the Competition Commission failed to address the issue in the two-year grocery market inquiry.

“They must not make the same mistake again; we need a full and robust investigation into the implications of the continued growth of the One Stop format.”

But David Turner, chief executive of One Stop, said the deal would bring down prices for customers.

He said: “Acquiring 77 Mills stores means we can introduce One Stop’s quality, range and value to the communities they serve. We’ll be investing in refurbishing the stores, creating an even better shopping experience, as well as bringing down prices.”

The deal is now set to come under scrutiny by the Office of Fair Trading.

A spokesman for the organisation said: “We are investigating this particular proposed acquisition.

“We have issued an invitation to comment which allows any interested parties to comment on the possible competition implications of the purchase.